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Planning for Success(ion)

Planning for Success(ion)

By Dr. Hal M. Lewis for eJewish Philanthropy

The time has come to abandon the insulting notion that programs of Jewish literacy, however excellent, are in and of themselves, leadership programs. Similarly, American Jewish groups must cease the dysfunctional practice of parachuting people into positions of communal responsibility just because they have been successful in business.

Thoughtful observers of the American Jewish scene cannot help but notice that over the past year considerable attention has been devoted in the Jewish media to the issue of succession planning in organizational life. Occasioned most immediately by the sudden departure of several high profile organizational CEOs, and fueled further by what some see as an increasing tendency to replace long serving executives with individual from outside the communal world, an electronic firestorm has erupted in the Jewish press.

Concern is hardly unwarranted. As far back as 2006 surveys have documented a looming crisis. A CompassPoint analysis in that year found that of 1900 nonprofit leaders, 75% planned to leave their job by 2011 (“Daring to Lead,” CompassPoint 2006). Even more dramatically, a study conducted for the Andrea and Charles Bronfman Philanthropies in 2009 predicted that, “within the next five to ten years, the baby boomers will retire and leave upwards of 75-90% of Jewish community agencies with the challenge of finding new executive leadership” (Austin and Salkowitz, “Executive Development & Succession Planning,” 2009).

The latest research from the Jewish Federations of North America corroborates these trends. JFNA indicates that during just the last 24 months, the rate of change at the CEO level in Jewish federations is approximately 27%, with many additional federations having initiated searches just since the start of the current fiscal year. At the large and large intermediate federations, the rate of change in CEO positions is fifty percent within the past three years.

Beyond the statistics, what is known for certain is that the organized Jewish community from synagogues to federations, from social service agencies to arts organizations is woefully unprepared to deal wit the coming realities. Six years ago, a DRG survey of nonprofit executives found that 58% of respondents indicated that neither the management team nor the board had ever discussed transition strategy (“Nonprofit CEO Survey,” 2006). And the situation has only gotten worse.

The vast majority of Jewish nonprofits (81%) do not have an emergency back up plan designed to address the unforeseen departure of a CEO (such as has been evidenced in recent months).

An even larger percentage (91%) of those responding said that their organizations have no formalized succession plans.

The Jewish community’s failure to respond to these issues is not only bad business; it is antithetical to the best in Jewish wisdom and tradition. Woven throughout classical Jewish teachings and embodied in the example set by the quintessential Jewish leader, Moses, is a recognition of the fact that succession planning is the duty and obligation of all who claim to wear the mantle of leadership.

On the very day that Moses learns he will not live long enough to fulfill his life’s work and lead the Israelites into the Promised Land, he demanded of God that a successor be named. “Let the Lord, Source of the breath of all flesh, appoint someone over the community who shall go out before them and come in before them… so that the Lord’s community may not be like sheep that have no shepherd” (Numbers 27:15-17).

Here, Moses sets the standard for all those involved in Jewish communal life. Disappointed and scared as he surely must have been, Moses remained focused on the ultimate objective, getting the Israelites safely to the Land of Israel. To assure the continuity of the Jewish people, someone else would need to take over, and Moses understood that his job would not be complete unless and until he facilitated that transition. In the end, his own personal quest, however lofty or honorable, paled in comparison to the long term viability of the nation of’ Israel.

As if channeling Moses, leadership experts Jay Conger and David Nadler offer a strikingly similar assessment. “A truly successful legacy,” they counsel outgoing CEOs, “is one in which … successors flourish and company performance continues to be excellent” (“When CEOs Step Up To Fail,” MIT Sloan Management Review, Spring 2004).

Similarly, former Procter and Gamble CEO, A.G. Lafley reminds executives, “It’s not about you, the incumbent CEO. It’s about the institution and its future” (“The Art and Science of Finding the Right CEO,” Harvard Business Review, October 2011). Often times, taught Moses, the boldest act of effective leadership is preparing to pass the torch to the next generation.”

But long before a smooth transfer of power is possible, leaders must acknowledge one of the deep dark secrets of succession planning – the brutal fact, as Jim Collins calls it, that planning for succession is often painful and much easier said than done. The truth is that, for some, succession planning is an admission of mortality. For others, not withstanding the more than occasional headaches, power is alluring and tough to abandon. Leaders derive an enormous amount of tangible and psychic rewards from their work. The perks of power seem to conspire against the creation of a thoughtful approach to transitioning and succession planning. As the midrash states, “It is easy to go up to a dais difficult to come down” (Yalkut Va’etchanan 845). Having savored the limelight, long serving leaders are often reticent to make room for others, convincing themselves of their own irreplaceability. “All my life,” admitted Rabbi Joshua ben Quivsay in the Palestinian Talmud, “I would run away from office. Now that I have entered it, whoever comes to oust me I will come down upon him with this kettle [of boiling water]” (Palestinian Talmud Pesachim 6:1).

Further underscoring this point, the rabbis noted that even Moses had difficulty forsaking the mantle of leadership. In a remarkably insightful text, they suggested that despite his commitment to succession, when he realized he would no longer be in charge, Moses began to have second thoughts. “He can be compared,” said the sages, “to a governor who so long as he retained his office could be sure that whatever orders he gave, the king would confirm … But as soon as he retired and another was appointed in his place, he had in vain to ask the gate keeper to let him enter the palace (Deuteronomy Rabbah 2:5). Painful as it may be to admit, effective succession planning requires a recognition that careers and influence do not last forever.

And it is not just bald-faced ego that makes succession planning a challenge. The pervasiveness of “founders’ syndrome” haunts more than a few Jewish organizations. Long serving individuals, who have devoted incalculable amounts of energy, treasure, and self sacrifice over the years, often cannot face the prospect of handing over the reins. As Steven Noble found in his research on Jewish nonprofit executives, “many seemed to feel entitled to extend their tenures as long as they felt they were contributing.” Large numbers of Jewish organizational CEOs seemed to echo Louis XIV’s infamous pronouncement, “l’etatc’est moi,” manifesting what Noble describes as “a troubling degree of CEO expressed ‘ownership’ of their organizations” and a “high degree of personal possessiveness.”

Precisely because Jewish sources recognize that, in Conger and Nadler’s phrase, “succession is an emotional issue for many … and can lead to a variety of nonproductive behaviors,” the best of Jewish tradition insists that the training and development of the next generation be a preeminent communal priority. Which means that if organizational leaders continue to define succession planning as the singular process of replacing the CEO or even the board chair, they have missed the point. Succession planning is a systemic endeavor. It is an ongoing process that must inform and define the entirety of the enterprise. Key to effective transitioning is a system wide commitment to leadership training and development for both professionals and the laity across the organization.

An analysis conducted by Hewitt Associates called “Top Companies for Leaders,” first published in 2002, uncovered an incontrovertible link between financial success and great leadership training and development. The report notes: “organizations with a ready supply of talent and an ability to cultivate leadership capabilities up and down the ranks are well positioned to withstand turbulence in today’s business world… Said one company executive, “Leadership development is so much a part of our culture that we do not think of it as a discrete activity…” The report went on to find that “Companies such as GE, IBM, or P&G have a long tradition of CEOs and senior leaders spending a disproportionate amount of time on leadership and treating the development of the firm’s highest potential leaders as a personal responsibility” (Gandossy and Verman, “Building Leadership Capability To Drive Change,” Leader and Leader, Winter 2009). This is because, in the words of the great leadership teacher Tom Peters, at their core, “The best leaders don’t create followers, they create more leaders.”

To be sure, Jewish nonprofits characterized by tight budgets, small staffs, and the seemingly ubiquitous tendency that allows the urgent to trump the important, are not Fortune 500 companies. Nonetheless, if the organizational establishment is serious about addressing this crisis, it will begin to rethink its approach to the training and development of lay and professional leaders, without excuses. “Anyone who would exercise authority over a community in Israel,” teaches the Midrash, “without considering how to do so, is sure to fall and take his punishment from the hands of the community” (Song of Songs Rabbah 76:11,1). Or as the great expert on quality control, W. Edwards Deming used to say, “Training … is not mandatory, but neither is survival.”

For too long, and with very few exceptions, the organized Jewish community has made a mockery of leadership training and development, ignoring best practices from industry, the academy, and the best of Jewish tradition. Calling everyone who holds a titled position in the Jewish world a leader – regardless of skillsets or character does not make it so. So too, conflating volunteer orientation and donor education with leadership training only creates false and misleading expectations.

The time has come to abandon the insulting notion that programs of Jewish literacy, however excellent, are in and of themselves, leadership programs. Similarly, American Jewish groups must cease the dysfunctional practice of parachuting people into positions of communal responsibility just because they have been successful in business. Organizations must redefine what they mean by leadership training. It is a mistake to think that half day workshops or weekend retreats or minimum gift missions, “make” leaders. Instead, Jewish groups that are serious abou developing the next generation of leaders must consistently “invest in the best,” providing promising individuals the chance to “practice leadership,” by giving them challenging assignments at every level of the enterprise, beginning early in their tenures.

Leadership development is a protracted, not an episodic process. It cannot be relegated to the nominating committee or ad hoc search committee at the eleventh hour. Only when leadership training becomes an attribute of the system, only when today’s leaders are constantly on the lookout for those who will succeed them, and only when leadership training is declared a priority by the board and the executive, and supported with appropriate resources and systems, will the American Jewish community begin to solve this problem.

Incumbent leaders on both the lay and professional side must come to understand that responsibility for the future is theirs, not after they get finished with everything else, but from day one. North American Jewry has the capacity and the knowledge to fix this. Former GE Chairman Jack Welch said it best, “Before you are a leader, success is all about growing yourself. When you become a leader, success is all about growing others” (Winning 2005).

To be sure, executives bear major responsibility. In the words of a 2008 Annie E. Casey Foundation analysis: “Nonprofit executives must be willing and able to let go and allow their organizations to distribute managerial and leadership responsibilities among a number of staff. These executives,” urges the study, “must relinquish an all too common vision of heroic leadership, in which they valiantly and alone confront almost impossible demands on their time, emotions, and energy. Most importantly, they must be truly willing to share authority”(Building Leaderful Organizations, 2008).

But at the same time donors and board members are also accountable. “Choosing the next CEO,” said P&G’s A.G. Lafley, “is the single most important decision a board of directors will make … All companies should have a plan for handling the normal transfer of power as well as for dealing with emergencies…” At the most basic level, cautions the Casey study “succession planning is a sound risk management practice.”

In May of 2007, a Harvard Business Review analysis concluded that, “high performing companies almost never replace their CEOs with outsiders.” This is further corroborated by studies conducted by the Center for Creative Leadership, which reveal that a “staggering 66 percent of senior managers hired from the outside usually fail within the first 18 months” (Andre Mamprin, “Five Steps for Successful Succession Planning, Center for Association Leadership, December 2002).

In recent years, and often with considerable controversy, North American Jewry has witnessed a number of important communal positions filled by individuals who come not from within the system, but from outside the Jewish nonprofit sector, most particularly the corporate arena. There may be any number of reasons why this is a positive development, if, for example, it is driven by a desire to challenge the system and as Peter Drucker once said, “to bring the outside in.” But if the reason for going beyond the organizational infrastructure of Jewish communal life is rooted in desperation, because institutions and organizations have failed to identify, nurture and train tomorrow’s leaders, then it is time to do teshuvah. And begin immediately to return to the teachings of Jewish tradition and best practices in order to fix what has been broken.

Dr. Hal M. Lewis is the President and Chief Executive Officer of Spertus Institute of Jewish Studies, in Chicago. A recognized expert on Jewish leadership, his books include Models and Meanings in the History of Jewish Leadership and From Sanctuary to Boardroom: A Jewish Approach to Leadership. This article was adapted from his presentation to the 2012 General Assembly of the Jewish Federations of’ North America.